cream: cash rules every thing around me

What is wrong with a little bit of synergy?

May 31, 2010
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by Brian White

Throughout the duration of this course, we have discussed the existence of synergy and its place in the media. As an advertising major, I have had to come to grips with its existence and determine to what extent am I “ok” with it. Well, to answer that plainly I would have to say I am perfectly “ok” with it. Normally, I am not the kind of person who gives in to the, “Deal with it, there is nothing you can do about it,” type of attitude, but in this case I think that’s exactly what you have to do.
Coke-Placement
We look to the infamous American Idol show for one of the most obvious placements of a product: Coke. As the consumer, I have a decision. Am I really going to believe that all that’s in Paula’s cup is Coke? We know better than that.The same can be said of NBA games. Are they really drinking Gatorade? I think the question should be, “does it really make a difference?” I suppose I am more concerned about the effects these product placements have on the more impressionable minds of adolescents, but really I’m not too worried. People should be able to see through these ads and maybe even to the point of being upset by them. We all know its not Gatorade, just like we know Marcin Gortat loves Jordan.

When Reebok flips the bill, Jordan tat has gotta go... at least that

In Gortat’s case, he told Reebok where they can “put” their complaints thus giving Jordan brand and Nike some free publicity, but what does Coke or Gatorade get for their placements? Sure there is some brand awareness and some product association, but how much product consumption does that really drive? In 2008 NBC teamed up with Universal in a different kind of cross-promotional campaign linking NBC network shows with the Universal movie Hellboy 2. The concept was to use NBC show commercial formats and insert the main character from Hellboy.

This instance is a pairing of two of General Electric’s major interests NBC and Universal. The primary objective was to advertise for Hellboy 2 , but as a secondary goal General Electric decided to also promote its network. This is the prime example of “two birds with one stone” or three if the commercials were to air on any GE owned channel. And what is wrong with this kind of synergy? My answer remains, but it does lead us down a slippery slope.

I think it is safe to say that although some cross-promotional advertising is ok, not all of it receives a pass. When it comes to product placement in television or cross-promotional commercials, my interest is hardly peaked, but when it comes to synergy in news broadcasts my concern grows.

Sometimes I have more faith in the "fake news" shows than in anything else.

Given the potential new deal with Comcast, critics worry the cross-promotion could become a problem. The coverage of this merger has been fairly sparse and some have theorized it is because of GE’s ability to shield the news. According the a report done by FAIR, in 2000 61 percent of investigative reporters felt pressure to either report or not report on certain issues pertaining to stakeholders and advertisers of companies related to their outlet. This is an interesting and scary statistic when you consider how and who you trust to get your news.

When all is said and done, how do you feel about synergy? Is it as innocent and straightforward as product placement of coke products in a sitcom or is it an attempt to use a corporations media outlets to cover up an embarrassing scandal? I think synergy is something that everyone needs to be aware of. Like all things, one must be skeptical of the potential intentions and benefits a company may have for portraying things, but I cannot say that all synergy is bad. Just some.

LA Times
FAIR – How Power Shapes the News
synergyBlog
Illinois Business Law
Reuters on FCC
Ad Age
NBC + Comcast Merge
Hellboy gets NBC backing
synergy in the movies

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“30 Rock”

May 17, 2010
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by Brian White

Tina Fey’s hit NBC comedy, “30 Rock,” has received many accolades from the award community winning the Emmy for Best Comedy Series each of its three seasons the latest in 2009. Tina Fey began her career with “Saturday Night Live” in 1995 when friend Adam McKay came to Chicago in search of writer. After 8 extremely successful years with “SNL,” Fey approached NBC with a proposition for a new sitcom in 2003 based on her work experience as a writer for the network. Although my teacher, Andre “Dj Foodstamp” Sirois, did a great blog post covering a recent episode that parodied the potential merger between NBC and Comcast, but I would like to examine further some of the other aspects of the show’s political agenda.

Some of the cast of "30 Rock"

Like I said earlier, “30 Rock” is an NBC show and is produced in conjunction with Broadway Video, Little Stranger Inc. and NBC Universal. Little Stranger Inc. is a smaller production company owned by Tina Fey that does primarily just “30 Rock.” Broadway Video Entertainment (BVE) was started by Lorne Michael the creator of “Saturday Night Live.” BVE has since grown into a larger company which now deals in television, film, post-production and enterprising and video. Along with “30 Rock,” BVE also does “SNL” and “Late Night with Jimmy Fallon.” Other than “30 Rock” and “SNL,” Lorne Michaels has also had his hand in the pot of a few movies such as “Wayne’s World” and “Mean Girls” (and yeah, I said “Mean Girls,” but do not even try to hate. That movie was good).

yesss... quite menacing

“30 Rock” is filmed primarily in a studio just outside of Manhattan where the show takes place at Silver Cup Studios. Silver Cup has been the home to many great television shows such as HBO’s “Sex and the City” and “The Sopranos” as well as Fox’s “Gossip Girl,” many feature films including “Gangs of New York” and “Big Daddy” and also several hundreds of commercials. In other words, Silver Cup is a pretty big deal for NYC’s production scene.

General Electric (GE) took control over NBC during its reacquisition of RCA in 1985 reuniting the two companies after over 50 years of separation. Over the course of the next 20 years, NBC grew and expanded. It started CNBC, the business network in conjunction with Dow Jones, GE acquired Telemundo,  the Spanish network and it absorbed Vivendi in 2003. What this meant for NBC Universal was an increase in its ability to reach consumers on a national and global level. NBC is now the 4th largest broadcasting network in the country reaching millions of viewers through more than 200 affiliate stations including 10 company owned and operated. In 2007, NBC Universal and Fox joined efforts to create Hulu the online streaming website that allows users to watch video from over 200 content providers. In 2009, Disney joined up and is now a partner in Hulu.

Now, like I mentioned earlier, GE and Comcast are in talks over a potential merger between NBC Universal and Comcast. Comcast is the country’s largest provider of internet and cable service in the country and is potentially going to become the majority shareholder of NBC if the merger goes through (51%). So what does this mean for the consumer?

Well some people worry that this could change consumers access to content such as Hulu. Considering Comcast’s potential control over Hulu through NBC, some worry that Comcast will restrict access to its users only, or push Hulu to offer less free content and more paid content. The idea behind this would be that if you are a paying Comcast cable member, you would be able to view this for free, but if you are not you would have to pay on a per view or monthly basis. See TV Everywhere for more information on Comcast’s online cable interests. Also, others worry that this shift in ownership could lead to less access to NBC content. Some believe that Comcast will raise the rates it charges
its cable competitors for rebroadcasting NBC content or even pull NBC’s broadcast signal leaving non-Comcast users without access to NBC content.

So what does “30 Rock” have to do with all of this? Well, GE has a significant interest in seeing this deal go through (about $30 billion good reasons) and GE owns NBC. Historically, news corporations have preferred to sweep their business under the carpet and use their media influence to avert the public’s eye; in this case, GE has a done a pretty good job avoiding the critical media’s attention, but it has done something a little different. It has allowed one of NBC’s most critically acclaimed shows parody the business transaction. Hmm… Is this really addressing the issue?

I get that the “30 Rock” cast is taking a humorous and somewhat satirical approach to the merger, but it’s really not pointing out the serious implications of a merger such as this (like the ones we discussed earlier). What “30 Rock” has done, however, is allow GE, NBC and Comcast to own the merger and some of its ridiculousness in a light-hearted, funny way, which allows them to easily shift the focus of the merger. It is a practice in environmental advertising that we call “greenwashing,” or in other words energy companies or car companies trying to own “clean coal” or “clean diesel,” when there really is no such thing. It’s disingenuous. And in this case, it is not so much that NBC is making false claims about its merger, rather it is using “30 Rock” as its “critical” news source instead of its actual news networks such as CNBC, NBC and MSNBC. Although “30 Rock” does do a great job critiqueing, parodying, and overall questioning of media, but it is also interesting when one thinks about how that can change your overall sense of duty to question it yourself. I think we must be cautious when looking at these kinds of shows and although we feel good when we see them mocking themselves, is it really enough or should we go deeper into the issues? I think this is one of the problems of horizontal integration of a company like GE, because they have the ability to influence so many different arms of the media. They have entertainment, news and now with the potential merger even more power to control the media. Just something to think about as the deals go down and you see your media change… Cause trust me it will.

Broadway Video Entertainment
Silver Cup Studios
Time
NBC’s “30 Rock”
NBC Universal
Tina Fey and the Emmy’s
Reuters
Hulu
NBC Universal History
NY Times on Merger
Comcast Corp.
Hulu LLC


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General Electric a corportate profile

May 3, 2010
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by Brian White

General Electric (GE) was established in 1892 when Thomson-Houston, an electric company from Massachusetts, merged with Edison General Electric at the behest of J.P. Morgan. In 1879, Thomas Edison and his assistant Francis Jehl created the first long-lasting incandescent bulb, which created a craze in the marketplace for electricity. Edison was a smart man, but not a great bussiness manager and as a result his companies would go through a series of transformations until it finally formed GE. Thomson-Houston brought with it the capital and some patents, but Edison General Electric brought with it the light-bulb and the business savvy of Morgan. Morgan was a firm believer in corporate consolidation and it would be this mentality that would grow GE into one of the largest companies in the world. Despite the merger, Edison had no involvement in GE and instead the CEO of Thomson-Houston Charles Coffin took over the new company.
GE started out with its interests mainly invested in electrical generation, transmission and lighting, but within its first ten years of operation it had already expanded into producing machinery for businesses and domestic appliances.

In 1900, GE established the first corporate research facility under the supervision of Charles Steinmetz. Over the next ten years the lab would improve upon Edison’s bulb creating the tungsten filament and also the first X-ray tube establishing the company’s foray into medical equipment.

In the early 1900s the company also started producing toasters and irons to sustain the company’s growth. Later in 1910 it introduced a waffle iron and an experimental home refrigerator. GE knew that in order for its generation and equipment operations to continue to grow it needed to provide a solid market for electricity.

In 1917, the U.S. began using GE produced engines for their air-crafts.

In 1918, GE underwent yet another merger when it joined forces with Pacific Electric Heating Co. and Hughes Electric Heating Co bringing with them an electric range and the hot point iron for production and sale. Within the next few years, GE was offering home refrigerators, vacuum cleaners, washing machines and various other household products.

In 1919 the the American Government approached General Electric and asked it to invest its interests in starting an American broadcasting company. In response to the governments request, General Electric, Westinghouse, A T and T and United Fruit signed a cross-licensing agreement resulting in the creation of the Radio Corporation of America (RCA). GE would remain the majority shareholder in RCA and, along with the other companies, used the broadcasting arm of RCA to promote and market its products. In 1926 RCA created its first network, NBC, with GE as the minority shareholder to A T & T due to the latter’s majority ownership over the transmission lines used. By 1927, NBC had two radio networks, NBC Red and NBC Blue, and a clear dominance in the radio market. GE experienced great success from its holding in RCA until 1932 when the government deemed its ownership as illegal and issued an anti-trust and RCA emerged as an independent company.

GE’s incredible success was soon being interpreted as dominance and was cause for growing concern within the Department of Justice. A similar case occurred six years later with the branch of GE in control of public utilities. In 1905 GE established an Electric Bond and Share Company (EBASCO) a branch used to finance and grow public utilities. EBASCO grew through mergers and buyouts to be the third largest utility holder in the United States, until 1938 the government passed the Public Utility Holding Company Act, which forced them to sell off their monopoly.

After the split, GE was allowed to continue manufacturing radios, but began to hone in on other avenues for business. By the start of the Second World War, GE turned its focus to the production of radar equipment and power-plants for ship building as well as producing some of the first jet-engines for planes.

In the 1950s GE used Ronald Reagen as its Ambassador sending him around the world to promote GE.

In Post-War America, however, GE continued to face more anti-trust problems. In 1961 GE was indicted along with 29 other companies for price fixing on electrical-equipment.

During the ’60s, GE had come to the conclusion that it was too large and its operations too confusing. The result was a decrease in operating units from over 200 to just 43, which either involved the sale or merge of subsidiaries into one operating unit. The restructuring allowed GE to then make the largest purchase in corporate history. In 1976, GE bought Utah International for $2.2 billion and within a year was contributing 18% to GE’s total earnings. Included in its divestitures of the ’60s was Honeywell a computer company. Although the company was losing money losing the company left GE well behind in the developing technology industry and according to a 1975 report GE no longer considered a leader in electronics. This, coupled with the takeover of Jack Welch in 1981 would shape the face of the GE we know today.

John (Jack) Welch

When Welch took over GE its annual revenue was about $26.8 billion, but when he left in 2000 its revenue was at $130 billion. During his tenure as CEO, Welch bought 338 companies and sold 232 and helped to completely restructure the company to make it more self-sufficient. Welch guided GE into new markets as well. The company began selling and leasing heavy industrial goods, inventories, real estate and insurance. His largest purchase, however, came in 1986 when GE bought RCA.

In 1990, GE divided its company into three parts: technology, service and manufacturing. In 1992, GE made a purchase of about 50% of Britain’s General Electric Company (GEC). In 1996 GE worked with Microsoft to launch the 24-hour news network MSNBC. GE also made an international splash in Asia and Brazil with large auto leasing firm purchases and domestic appliance company purchases and in 2001 GE purchased a global finance firm based out of Chicago that would mark the end of Welch’s reign with GE.

Along with some other financial investments, GE purchased Vivendi Universal Entertainment (VUE) in 2003. This purchase most notably included the acquisition of Universal Pictures and its studios as well as the USA television network.

GE is currently working on orchestrating a NBC and Comcast merger that has received a large amount of criticism.

In following the history of General Electric it is obvious that its arm reaches across many markets and many industries. From domestic appliances, to jet engines, to energy generators, to television, radio and movies to automotive insurance and financial lending, GE has its hand just about everywhere. With Fortune 500’s 2010 ranking at number 4, GE is definitely one of the most powerful companies in the world.

Source Watch

Hoovers

General Electric

Ketupa

Corp Watch

Funding Universe

For a comprehensive list of General Electric’s media share go here to the Free Press website.


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Advertising Student at the University of Oregon interested in becoming a writer...

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